Q3 2024 Alliant Energy Corp Earnings Call

Lisa Barton

Thank you, Susan. Good morning, everyone, and thank you for joining our third quarter earnings call.
Today, we’re pleased to share our Q3 results, another quarter where we delivered solid financial performance while advancing our key strategic priorities. We’ll take you through the details of our performance share our outlook for the remainder of the year, provide insights into our strategic initiatives and discuss how we’re positioned for continued success and growth over the longer term.
We are narrowing our 2024, ongoing earnings guidance range based on our confidence in our ability to offset a majority of the negative impacts of temperatures and we are reaffirming our long-term earnings growth target of 5% to 7%.
Looking ahead, I’m pleased to share our 2025 earnings guidance and dividend targets. Our 2025 earnings guidance midpoint represents a 6% increase to our midpoint of our forecasted 2024 ongoing earnings. And our 2025, annual common stock dividend target is $2.03 per share, a 6% increase from this year’s dividends. While we are sharing our Q3 2024 results today, our team is acutely focused on the future and building a strong pipeline of investment opportunities while concurrently solving for affordability.
Our relentless focus on delivering consistent, predictable results with a steadfast commitment to customer centricity, affordability, reliability and sustainability serves as the foundation of our strategy. In a rapidly evolving energy landscape, four key strengths set us apart and underpin our success in supporting growth of long-term shareholder returns.
An economic development focus, we drive growth in the communities we serve, creating shared prosperity and building robust local economies. Use of a dynamic resource planning model our flexible approach to resource planning ensures our ability to scale generation quickly with a nonlitigated resource plan to meet evolving customer and community needs forward-thinking regulatory alignment.
We work proactively with our regulators and intervenors to shape frameworks that solve for affordability and growth strengthening our ability to provide win-win outcomes, strategic capacity positioning, leveraging existing resources along with strategic generation positions enables us to adapt our generation portfolio as customer needs evolve.
These differentiators enable us to pivot as needed to grow with our customers. With that in mind, I’m excited to announce we are preparing to bring two prestigious data center companies to our Big Cedar Industrial Center in Cedar Rapids, Iowa. We expect these data centers to add 1.1 gigawatts in Phase I, which is anticipated to come online by year-end 2028.
This first phase of new data center demand is projected to boost our peak demand by nearly 20% over the next five years, with the potential for a second phase by the end of the decade. We are confident in the timing and the magnitude of the 1.1 gigawatts, all of which is backed by fully executed land transmission and energy supply agreements.
We will continue to provide updates on future loads and new customers as we gain greater clarity on the size and timing of the forecasted load. Our recently approved Individual Customer Rates or ICR in Iowa is enabling Alliant Energy to adapt and align with the needs of both future and existing customers while ensuring meaningful long-term growth for our investors.
We appreciate the Iowa Utilities Commission recent decision supporting our rate review settlement and use of the ICR construct. This order stabilizes base rates for Iowa customers through the end of the decade, providing predictability for current and future customers.
The ICR also serves as a tool for economic development and community growth in Iowa. We look forward to the Iowa Utilities Commission review of our ICR contracts for these new customers. As we have mentioned in the past, we are committed to ensuring all such arrangements are beneficial for existing customers, new customers and our shareowners. This year, we are refreshing our clean energy lucent which serves as our resource planning process and road map.
This unique dynamic and non-litigated resource planning process provides for meaningful stakeholder engagement. It is a disciplined and thoughtful approach that proactively adapts to MISO accreditation changes and aligns our energy resources with growing demand.
By evaluating our needs to support low, mid- and high- low growth scenarios, we have the ability to flex our resource plan as necessary. The 2025 to 2028, capital expenditure plan incorporates a mid-growth scenario or Phase I of anticipated economic growth at big Cedar.
We recognize supporting reliability, resiliency and the clean energy transition requires continued robust planning, a strong transmission network and a mix of flexible controllable resources such as natural gas, energy storage and advanced grid technologies to ensure grid reliability.
Our CapEx plan includes investments in strengthening and improving the performance of our existing natural gas investments, additional energy storage. Additional highly efficient natural gas assets to further diversify our energy mix.
And finally, as we have done in the past, we will continue to evaluate extending the operation of existing fossil facilities and repowering opportunities. These investments in energy resources will enhance energy security, create local jobs and provide valuable tax revenues for the communities we serve all while maintaining affordable rates for our customers across Iowa and Wisconsin.
In both Iowa and Wisconsin, the regulatory environment is collaborative, constructive and fosters growth. Collectively, it’s a win for all stakeholders and critical to our success in meeting the evolving needs of our customers and the communities we serve.
I want to underscore our unwavering commitment to continue providing top-tier reliability and achieving our long-term sustainability goals outlined in the corporate responsibility report published this week. We are extremely proud of our efforts to enhance our portfolio of zero fuel cost, clean energy resources.
Alliant Energy continues to be a leader in the clean energy transition with 1.8 gigawatts of regulated wins. And by the end of this year, 1.5 gigawatts of regulated solar resources. We plan to continue investing in renewable generation and energy storage.
In fact, over 40% of our 2025 to 2028, capital expenditure plan includes investments in wind, solar and energy storage. These investments result in our company having one of the cleanest fleets in the country. Our focus on customers and building stronger communities is at the heart of everything we do. With our strong track record of exceptional project execution, we are confident in our ability to continue meeting customer, community and investor expectations.
Speaking of communities, I would like to extend my gratitude to the many business partners, vendors and providers who collaborated with our foundation to help raise more than $0.5 million this year to support programs that combat hunger and food and security across our service territories.
Before we dive into our financial results, I want to take a moment to express my deepest gratitude to our dedicated team members who go above and beyond to help communities in need. In support of the industry’s mutual assistance efforts, our team went their expertise to restore power to communities impacted by Hurricane Helene. The team’s dedication and willingness to lend a hand exemplifies the strength and unity of our industry. Thank you for your incredible work and commitment.
I will now turn the call over to Robert to provide our financial results, earnings and dividend guidance, financing plans and an update on regulatory matters.

Robert Durian

Thank you, Lisa. Good morning, everyone. Yesterday, we announced third quarter earnings of $1.15 per share compared to non-GAAP earnings of $1.05 per share in the third quarter of 2023. Our quarterly ongoing earnings change year-over-year was primarily due to higher revenue requirements from capital investments at our Wisconsin utility and the timing of income tax expense.
These positive drivers were partially offset by higher depreciation and finance expense. The remaining earning drivers for the year largely related to negative impacts of milder temperatures on electric and gas sales and our team’s successful efforts to reduce O&M, interest and tax expenses to offset a majority of our temperature impacts.
Through September of this year, net temperature impacts on electric and gas margins have decreased Alliant Energy’s earnings by approximately $0.10 per share. In comparison, net temperatures decreased Alliant Energy’s earnings for the first three quarters of 2023, by $0.02 per share.
While temperatures have had a material impact on earnings in 2024, margins from our temperature-normalized electric sales have been close to plan with higher-than-expected sales to residential and commercial customers partially offset by lower sales to our low-margin IPL industrial customers, primarily due to less customer-owned generation maintenance in 2024.
Turning to our full year 2024, earnings forecast. As a result of our solid earnings through September, our successful efforts to offset a majority of the losses due to mild temperature impacts and our projected fourth quarter results. We have narrowed our 2024, earnings guidance to a range of $2.99 per share to $3.06 per share.
As Lisa mentioned, we also announced our projected 2025, earnings guidance range and dividend target yesterday. The 2025 earnings growth is driven by higher earnings from capital investments in both Iowa and Wisconsin, partially offset by higher depreciation and financing expenses.
Our 2025 earnings and dividend guidance continue our consistent track record of achieving our long-term growth targets of 5% to 7%, our team has continued to advance our purpose-driven strategy to ensure we not only accomplish our current year goals but also enable the achievement of our financial and operational objectives over the long term.
These long-term objectives include a strong focus on customer value while planning and investing for the future. We are well positioned to provide competitive rates for our customers over the long term as a result of our economic development efforts, our continued focus on cost controls and our pursuit of federal program benefits.
Our economic development efforts, including new data center loads are expected to increase energy sales over the long term which spreads fixed costs across more units sold, thereby driving affordability for our customers and communities.
Through our continued focus on operational excellence, and cost management efforts to offset inflationary pressures, we are targeting sustainable cost controls across various expense categories to support customer affordability. As part of these efforts, we are restructuring our workforce. We have initiated a voluntary employee separation program in the fourth quarter, which is expected to reduce our current workforce by approximately 5%.
In addition, we continue to drive reductions across other expense categories to deliver on investor and customer expectations. One area where we see this happening is with our generation transition. As we continue to move to more renewables and energy storage, while preparing to fuel switch or retire our fossil fuel generation resources, we will continue to reduce our operating costs.
Also, with the implementation of our planned additional renewable and energy storage projects and the repowering of our wind facilities, we anticipate the tax credits and reduced fuel expenses will help offset the impact of increased renewable rate base, entering these new investments highly cost effective for our customers. This commitment will result in long-term benefits for our customers and long-term value for our shareowners.
With our success thus far in advancing and executing on our capital projects, we expect to continue capturing additional federal benefits by applying for grant and loan funding maximizing tax benefits from renewables and energy storage projects and leveraging opportunities to monetize tax credits, which materially improve our cash flows and credit metrics as well as reduce future financing needs.
The US Department of Energy’s recent announcement that we were selected for a $50 million grant to advance electric grid reliability, visibility and control and robust content is a great example of our team’s successful efforts to capture such federal benefits for our customers. Yesterday, we announced an updated capital expenditure plan through 2028.
The updates to our plan were largely related to increased capital expenditures for additional generation and energy storage projects necessary to meet growing demand from our customers in the future. Our customer-focused investment plan continues to diversify our generation resources while transitioning our fleet to more renewable and energy storage resources.
We have increased our four-year capital expenditure plan by approximately $1.8 billion and now have a compounded annual growth rate of 10% for rate base plus construction work in progress, extending our confidence in meeting the long-term growth objectives shared with our investors.
Moving to our financing plans. In September, we successfully completed $650 million of debt issuances at IPO,which has finalized our planned debt issuances for 2024. We plan to use the proceeds from these debt issuances to retire maturing debt in December and finance the 400 megawatts of Iowa solar projects which we expect to be in service by the end of the year.
As we look to future financings and with the increase in our capital expenditure plan, we have provided updated financing plan indications through 2028. And on Slide 7 of our supplemental slides. Of note, our capital expenditures will primarily be financed with a combination of cash flows from operations, including significant proceeds expected from the continuation of tax credit monetization and new debt and common equity issuances to maintain regulatory capital structures and a desired parent capital structure of approximately 40%.
More near term, our 2025, financing plans include up to $1.2 billion of long-term debt issuances, including up to $600 million at each of IPL and Alliant Energy Finance and/or at the parent. Our 2025, financing plans also include approximately $25 million of new common equity through our Shareowner Direct Plan.
Finally, I’ll highlight our regulatory initiatives in progress. as well as those regulatory filings we plan to initiate in the future. We have three active dockets currently in progress before the Public Service Commission of Wisconsin, which involve requests for certificates of authority for customer-focused investments.
These dockets relate to investments, which will enhance the reliability and resiliency of the Riverside Generating facility, refurbished the Bent Tree Wind Farm to extend production tax credits from the facility for the benefit of our customers and enable a new long-duration energy storage project called Energy Dome, which would be sited next to the Columbia Energy Center. We expect decisions from the Public Service Commission of Wisconsin on these dockets in 2025.
Turning to our planned regulatory filings in the future. We anticipate filing the Wisconsin retail electric and gas rate review for test years 2026, and 2027, by early second quarter of 2025, and in conjunction with our updated capital expenditure plan, we also expect to make regulatory filings in both Iowa and Wisconsin for additional renewables and disposal resources to enhance reliability, further diversify our energy resources and meet growing customer energy needs.
I’ll now turn the call back over to Lisa to provide closing remarks.

Lisa Barton

Thank you, Robert. It’s an exciting time to be in the utility industry, and more importantly, it’s an exciting time to be at Alliant Energy. In closing, I want to reiterate the elements that set Alliance Energy apart. It’s our ability to continually solve the Rubik’s cube of balancing reliability, sustainability, affordability and long-term growth.
Our unwavering commitment to building stronger communities and advancing economic development is the driving force behind our long-term growth opportunities. Our ability to grow in tandem with our customers and communities is underpinned by our flexible, timely and adaptable resource planning process which enables us to identify and advance the generation resources needed to support growth.
Having access to near-term generation resource allows — resources allows us to meet our customers’ desired time lines. While our investments in future generation positions ensures we are well positioned to adapt and grow at the pace of our customers and communities.
As we all know, location matters, we are in a strong RTO, operating as a vertically integrated company with the right and obligation to build, own and operate generation to serve our customers in states with regulatory frameworks that align with our ability to support continued growth.
As we move forward, we remain focused on aligning and adapting to meeting the evolving energy needs of those we serve and those we have the privilege to serve. We remain confident in our team’s ability to execute on our strategic and operational priorities to drive sustainable growth.
Thank you for your continued support. We look forward to speaking with many of you at the EEI Financial Conference and plan to post updated materials on our website next week.
At this time, I’ll turn the call back over to the operator to facilitate the question-and-answer section.

Operator

(Operator Instructions). Nicholas Campanella, Barclays.

Nathan Richardson

This is Nathan Richardson on for Nick. Happy Friday. Just a couple of questions for you. So should you shift into the high case for load growth? How could that affect where you end up in the 5% to 7% long-term EPS growth guidance?

Lisa Barton

So the way of really looking at that long-term growth is think of it as upside potential. What we’re really doing is extending our 5% to 7% growth opportunities. We anticipate that Phase II growth would likely be in those later years.

Nathan Richardson

Got it. Okay. That makes sense. And then one more on the equity you’re currently guiding to roughly 10% funding of overall CapEx only $25 million of issuance ’25. How can we think about contributions in ’26 and beyond? Would that (inaudible) and would that be covered under the ATM?

Robert Durian

Yeah, great question, Nathan. This is Robert. As we updated our capital expenditure plan and looked at the additional roughly $2 billion of investment we, do see a need for roughly about $1 billion of new common equity through 2028, to be able to maintain the strong balance sheet that we have and the equity ratio is at the parent company of around 40%.
And so, when you look at our capital expenditure plan over the four years, it is more heavily weighted towards the back half of the plan. So ’26, ’27 to ’28 to have higher levels of growth in CapEx. And so consider that’s the appropriate timing when we’re going to need that equity.
As far as kind of the volume of it, I do think it’s probably going to be fairly ratably over that ’26 to ’28 time period. And so with those levels roughly around $300 million to $350 million a year in that time frame, there is an opportunity for us to use ATMs at that level. So we’ll continue to evaluate that. There could be opportunities for us to reconsider that in the future, but that’s what our current plan looks like

Operator

Julian Dumoulin-Smith, Jefferies.

Julien Dumoulin-Smith

Nicely done here, I must say. A couple quick clarification, if I can, on the last one here. I mean, you talked about Phase II. Obviously, that’s through 28 here on Phase I. To what extent is there still kind of a tailwind here as you think about rolling forward in the ’29 and ’30?
I mean whether it’s the Phase II contribution or whether there’s just a further true-up on some of the CapEx, making its way into earnings and rate base as you think about like run rate ’29, if you want to think about it that way. Again, I don’t want to try to get too far ahead of your current plan here, but just try to think about some of the residual benefits here as you think over the subsequent two years.

Lisa Barton

Thanks, Julian, and great question. So as we mentioned, we are acutely focused on economic development. What we’re always trying to do is make sure that with respect to the information we’re giving investors. We are giving you information where we have a clear line of sight and confidence in the numbers and so forth. So we’re going to continue to evaluate that. And once we have a better line of sight with respect to the timing and certainty of that load growth, we’ll be providing updates on that.

Julien Dumoulin-Smith

Excellent. Okay. Fair enough. So it’s — yes. No, indeed, I think that’s the way we’ll view it. And then related here, I know you mentioned a few different times in your remarks about this the ICR and just working on the orbit tariff structure?
And then in tandem here, obviously, there’s very sharing bans, et cetera. How would you interpret what we’re seeing here today on the midpoint or the midrange case against where you’re targeting in terms of earned return scenarios here.
Again, I get there’s a few different permutations. But how would you think about level setting here, especially in the back end of that plant, given the ICR tariff and the contributions from these new data centers?

Robert Durian

Yes. It’s another great question, Julien. Yeah, as we think about the time frame when we see this data center load ramping up starting in 2027, 2028, and beyond. The higher the level of load growth, it will likely push us into some of those earnings sharing mechanisms.
But think of that as much later in our plan, kind of the back half in that ’28 and ’29 time periods. As we continue to grow the business and as Lisa indicated, as we think about future phases beyond this initial phase that we see at the big Cedar industrial site, that’s when you would likely see that triggering those are sharing mechanisms.

Julien Dumoulin-Smith

Right. So ’28 really is kind of the first big year that we would anticipate that kicking in really?

Robert Durian

Yeah, most likely. There could be opportunities. We continue to talk to several different other interested parties, data centers across our service territory. Big theaters is one of the industrial sites where we have these opportunities to scale transmission and mirror that up or combine that up with the resource capacities that we’re bringing online for generation to be able to meet these data center loads as we see other opportunities across the service territory and other industrial sites. The pace of that is largely going to be the contingent upon kind of the ability for us to get these other agreements locked up with data centers.
And so, right now, we see visibility to that happen in that 2829 time frame, but it could actually be a little bit quicker than that if we’re successful in getting some of these other data center contracts completed more time lines.

Julien Dumoulin-Smith

Excellent. So not just load growth upside, it’s also sharing an upside depending on how soon you can get the stuff. Excellent. Thank you, guys.

Operator

Andrew Weisel at Scotiabank.

Andrew Weisel

First, just a quick one on the ’24 guidance reduction. Was it just that you were unable to fully offset the weather headwinds from earlier this year? Or are there other challenges since then?

Robert Durian

Yeah. I think of it largely related to the temperature impact. So what we’ve seen through the first nine months of the year is about $0.10 of negative temperature impacts. We’ve also had a fairly warm October to start the fourth quarter.
But we feel like we have a good line of sight to be able to offset about 75% of all the negative temperature packs, thanks to the successful efforts by the team. Focused on reducing O&M interest expense, financing expense. And so with that confidence, we are going to stay within our range and it’s about a $0.03 decrease from the midpoint that we started the year.
But like I said, we’ve been able to offset at least about 75% of the temperature impact. So that’s how we factored into what we used for the updated guidance for 2024.

Andrew Weisel

Okay. Very good. Then on the CapEx side, I think you said the update includes Phase I spending. Do you also have assumptions around other economic development deals? Or are you conservatively excluding anything else until you get contracts signed. And same thing with the 3% to 5% load growth, trying to see if there’s upside should additional customers show up.

Robert Durian

Yeah. As we think about future economic development activities more broadly, including data centers, that would all be upside to our plan. So that would increase not only the capital expenditure plan that we put in front of the investor group here today, but also sales, which obviously is a key contributor to helping us with customer affordability.
So the more of these data centers that we’ll be successful landing into our service territory beyond this initial phase that we feel confident with. I think of that as all upside to our plan.

Andrew Weisel

Okay. Then my last question, I want to push you a little bit more and go back to one of the earlier questions here. Longer term, particularly the latter half of your plan here, I want to talk about upside here. You talked about accelerating loan growth based on what you’ve already got, you’ve got a 20% pickup in the peak load, 20% increase in the CapEx plan. potential for additional customers. And I know the limiting factor is always affordability. But you just talked about how these new customers help with that affordability side and you’ve got the ICR and other customer protection.
You talked about earnings sharing in the ’27, ’28 and beyond. Help me understand here, why are we still talking about 6% and not something faster? What’s limiting the potential to not at least say the high end of the 5% to 7% range? And what are some factors keeping us from getting 7% growth or maybe even better than that in the outer years? Or is it just conservative?

Lisa Barton

Andrew, just a great question. So this is all about timing. We really want to make sure that we have accurately forecasted in terms of when this load is coming online. That’s something that you will continue to hear from us on a going-forward basis as any updates with respect to the timing of that load.
Anything, Robert, that you’d like to add?

Robert Durian

As well as long as we’ve known each other, we tend to be more conservative than most. And so we’re not going to get out in front of our story. And so we’ll be sure to share all the information once it’s available, but we are going to stay conservative with data center loads until we have those locked up and then we’ll share more information. So I expect future updates in the future as we finalize additional agreements.

Operator

Paul Fremont, Ladenburg.

Paul Fremont

And congrats on a great update. First question on Slide 5. Just to clarify, you’re already at the mid with the 1.1 gigawatts, right? So I’m not sure I’m understanding sort of the low flat area.

Lisa Barton

Say the last part, Paul, of your question?

Paul Fremont

I’m assuming that you’ve already hit the mid 1 — roughly 1 gigawatt.

Lisa Barton

[1.1].

Paul Fremont

So that would rule out the low flat scenario, right? Just for clarification.

Lisa Barton

Yes, yes.

Paul Fremont

Okay. And then in terms of discussions or talks, where do you currently stand? Do you think you’re closed on any other potential announcements? Or would you say that, that weighs off?

Lisa Barton

Well, Paul, as we’ve indicated, we continue to talk to data centers. We continue to reiterate the fact that we’re going to be conservative with respect to talking about prospects. We want to make sure that if they’re on our land, we’ve got the land agreements executed, the transmission capacity agreements executed as well as the energy service agreements executed.
And even with that, what we’re looking for is to have that very clean line of sight with respect to the timing of that low growth and the magnitude of that load growth. We certainly understand that these are very large customers, and we want to make sure we’ve got that timing right, so you can reflect it accurately in your models.

Paul Fremont

And then when you’re filing Wisconsin content next year, would you consider filing something similar in terms of regulatory plan is what you filed in Iowa?

Lisa Barton

What works — we’ll continue to evaluate what we put together there in Wisconsin. The Iowa solution is probably likely somewhat unique to Iowa. But what we’re always going to do is look to our jurisdictions and figure out what’s the best solution for existing customers, new customers and shareholders. Remember, in Wisconsin, we have the ability to go in every two years. We didn’t have that ability in Iowa, so that resulted in a need for a different constructs there.

Paul Fremont

And then last question, in terms of equity, would you consider using junior subordinated debt issuances to achieve some of your equity contribution?

Robert Durian

Yeah. Great question, Paul. I would consider that as an option for us in the future, we’re going to continue to evaluate all the different financing opportunities for us. Fortunately, we don’t see a need for I’ll say, equity content financing instruments in 2025 given where we’re positioned, but Think of that maybe towards the latter half of next year, we’ll consider some different options for us and provide some more information to the investment community once we make that decision.

Paul Fremont

Okay. So what you’re saying is that junior subordinated could constitute some of that $1 billion of equity needs that you’ve identified?

Robert Durian

We’ll evaluate that, like I said, when we get to kind of the latter half of 2025, and we’ll share some updated information at that time.

Operator

Aditya Gandi, Wolfe Research.

Aditya Gandhi

On your long-term EPS growth rate, could you clarify whether the base for that is now the (inaudible) ’24 guidance midpoint or us differently? Have you sort of rebased lower as it relates to your long-term earnings growth trajectory?

Robert Durian

Yeah, historically, and we’re going to continue with this method. We use the current year information. And so with the 2024 updated earnings guidance, the midpoint is roughly around $3.03. And so that’s what you should use for your long-term base going forward.

Aditya Gandhi

Got it. — Just to clarify there, should we think of that as the lower base implying lower longer-term earnings or not, is the point I’m getting to.

Robert Durian

Yeah. No, think of us, we’re still committed to the long term, a solid 6% growth rate. You will see 2024 was a lower year for us to start with, but we do see higher levels of growth in our kind of range over the longer term.

Aditya Gandhi

Got it. And then just moving to your financing plan. Robert, could you just give us some insights into the level of tax credits that you’re baking into your plan? And then what credit metrics you’re targeting?

Robert Durian

Yeah. So when we look over the next four years through 2028, we did provide some information in one of the supplemental slides that indicates how we’re going to finance the roughly $11 billion of capital expenditure plans.
So like we talked about in my prepared remarks, the majority of that is going to come from cash flow from operations, including tax contain we’re targeting roughly about $1.6 billion, $1.7 billion of tax credit monetization over that time period with the strong renewables that we have in place now and the additions we’re making with new renewables as well as energy storage.
We are going to average probably somewhere in the neighborhood of $300 million, almost $400 million a year in tax credits. And with the success that we’ve had with monetizing those to date. We feel very confident we’ve been able to do that in the future. And so that will roughly be like I said, about $1.6 billion, $1.7 billion over that five-year time period.

Aditya Gandhi

That’s very helpful. And one last quick question. as you’re speaking to additional customers about future load growth opportunities, should we expect another sort of revision before Q3 of next year? Is that something you’d consider? Or — is it just going to be this consistent cadence of Q3 CapEx updates?

Lisa Barton

We’re going to be looking and aligning with some of these new data center loads. So expect a revision possibly the first half of next year.

Operator

(Operator Instructions). Bill Appicelli, UBS.

William Appicelli

Good morning. Just going back to the question on the ’25 guidance. So I guess, what is the full impact that year-to-date for weather on ’24, I think it was a more normal weather, but you been more of the 306 or at the midpoint of the original guidance?

Robert Durian

Like I said in my prepared remarks, Bill, so weather so far through the first three months is about a $0.10 drag on earnings in 2024. We do expect October to add to that given it’s been pretty warm here in the Upper Midwest. And so in total, it’s probably closer to maybe $0.12 for the full year.
We’ve been successful, like I indicated before, being able to offset a majority of that roughly about 75% of that through a series of what I would characterize as nonsustainable offsets tax benefits, some portion of our O&M savings this year as well as we’re going to benefit from the reversal of an ATC ROE reserve as a result of the recent FERC decision.
And so I think of that offsetting is really kind of to position us to get back to that 303 that we’ve indicated as the midpoint of our guidance for 2024.

William Appicelli

Right. Okay. And then so — but we should assume that, that reverts back to normal next year, right? So in terms of the growth year-over-year, right? You’re going to get the weather back presumably — or that’s what you’re assuming normal weather and the guide for ’25, right?
So are there any other factors in terms of timing on costs or other things that are impacting the growth year-over-year we should think about? You talked about higher financing costs and depreciation. Any other color there?

Robert Durian

Yeah. So think of, like I indicated, a majority of the offsets that we’ve incurred in 2024, to that temperature, I would consider as nonsustainable. So we will get back to normal weather in 2025, but we won’t have some of those nonsustainable offsets in two — so it neutrals out and kind of gets us back to a position of having a normal run rate of 6% growth off of that $3.03 in 2025, with the earnings guidance.

Lisa Barton

One of the one thing that I would add is that we are going to continue to focus on looking at ways and identifying ways of using technology and so forth to drive costs out of the business as well as we’re going to continue our focus on economic development efforts and the more we can do with respect to economic development and bringing some of those loads on earlier or just an acute focus of ours.

William Appicelli

Okay. Great. And then just what is the more near-term load growth assumptions, say, for ’25 or ’26. I appreciate it’s going to be ramping as the load develops and the economic initiatives take hold, but maybe when you think about the sort of next year or two on the front end of that, is it at the 3%? Or is it something a little bit below that? How should we think about the near-term loan growth?

Robert Durian

When you think about the load growth for us, the data centers that we’re referring to, including the initial phase of the data centers that are coming into our Big Cedar Industrial side, think of those as starting up on a larger scale in the 2027 time frame. So in the next year or two, we’re expecting fairly consistent load growth to what we’ve seen historically. I think of that as maybe in that 0.5% or 1% range.

Operator

And ladies and gentlemen, it appears we have no further questions this morning. Ms. Gille, I’d like to turn things back to you for any closing comments

Susan Trapp Gille

With no more questions, this concludes our call. A replay will be available on our investor website. Thank you for your continued support of Alliant Energy, and feel free to contact me with any follow-up questions.

Operator

Thank you, Ms. Gille, again, ladies and gentlemen, that will conclude the Alliant Energy’s third quarter 2024, earnings call. Again, thanks so much for joining us, everyone, and we wish you all a great day. Goodbye.